LONDON/ROTTERDAM: Gold slipped as the dollar rebounded on Friday while platinum took a breather after expectations of a rebound in industrial demand drove a rally to a more than six-year peak and put it on course for its best week in two months.
Spot gold lost 0.5% to $1,816.40 an ounce by 1221 GMT and US gold futures were down 0.6% at $1,816.30.
"The inverse relationship between gold and the dollar has been strong recently and the rebound in the dollar has had a negative impact," said David Madden, market analyst at CMC Markets UK.
The dollar edged up 0.2%, reducing gold's appeal to buyers holding other currencies.
"In the short term, there is little to suggest that the prospects for gold will brighten, as this would require inflation risks to increase noticeably," Commerzbank analysts said in a note.
Gold is often seen as a hedge against inflation.
Still, expectations for an economic stimulus package in the United States helped to keep gold prices on course for a first weekly rise in three.
"Our thesis for the next year or two is that equities and gold are going to do well because of inflationary expectations and monetary and fiscal stimulus remain supportive for both," said Hitesh Jain, lead analyst at Mumbai-based Yes Securities, adding that the metal could rise to $1,950 this year.
Spot platinum dropped 1.3% to $1,219.13 an ounce after scaling a more than six-year peak of $1,268.88 on Thursday. The autocatalyst metal was also set for its best week since early December, gaining more than 8%.
"Reports that some futures and derivative exchanges have increased their margin requirements have put the brakes on the demand for platinum," CMC's Madden said.
But expectations of a rebound in industrial production and the automotive sector this year should lift the metal, he added.
Silver rose 0.3% to $27.04 an ounce and palladium gained 0.3% to $2,351.47.